FortisBC launches incentive program for heavy-duty natural gas vehicles

The environment, utility customers and fleet owners to benefit from the program

SURREY, BC, May 16, 2012 /CNW/ - Following the Government of B.C.'s Greenhouse Gas Reduction regulation announcement, FortisBC is today announcing an incentive funding program to assist qualifying heavy-duty fleet operators to purchase natural gas vehicles.

"FortisBC sees the potential of liquefied and compressed natural gas as a transportation fuel solution in British Columbia," said Doug Stout, vice president, energy solutions and external relations, FortisBC. "Over the past few years we've worked with several organizations with return to base, heavy-duty fleets including Vedder Transport, Waste Management and the Kelowna School District. Today's announcement allows us to build on these initial successes and help realize benefits for the environment, existing utility customers and fleet owners."

Program benefits include:

• greenhouse gas emissions reductions - ranging from 20 to 30 per cent through the displacement of high carbon fuels such as diesel. Greenhouse gas reductions from the first five years of the program are anticipated to be the equivalent of taking 12,000 cars off the road.
• fuel savings - natural gas is approximately 40 per cent less expensive than diesel. This could help reduce the cost of public services such as waste collection and transit and increase the competitiveness of B.C. businesses by reducing transport costs for goods.

"All gas utility customers will benefit from the additional volumes of natural gas moving through FortisBC's pipeline system," said Stout. "The costs of maintaining the pipeline system are recovered in the delivery rates of all customers. Better year-round, optimization of these pipeline assets, especially during the summer months when heating requirements are reduced, will result in a long-term, positive impact for our customers."

FortisBC will be applying to the B.C. Utilities Commission for a determination on how program costs will be recovered from all gas utility customers. It is anticipated that the long-term effect of the program will be a positive impact to customers' delivery rates.

"FortisBC's new program will help build B.C.'s global leadership in clean transportation and could lead to the conversion of approximately 1,500 vehicles, bringing new jobs and other economic opportunities to B.C.," said Rich Coleman, Minister of Energy and Mines. "Natural gas is a cheaper, cleaner alternative to traditional gasoline and diesel and this program will encourage more companies to take advantage of natural gas."

The $104.5 million in program funding includes:

• $62 million to offset a percentage of the incremental capital cost of a qualifying natural gas vehicle versus the cost of an equivalent diesel powered vehicle. This includes funding to provide training and upgrades to facilities to safely maintain natural gas vehicles.
• $12 million for compressed natural gas fuelling stations
• $30.5 million for liquefied natural gas fuelling stations

During the initial phase of the program, FortisBC will provide up to 80 per cent of new incentives for the incremental cost of a natural gas vehicle. FortisBC's plan is to decrease the funding by 10 per cent per each following year of the program as the adoption of natural gas vehicles in heavy-duty transportation increases. As natural gas fuel use in the heavy-duty transportation sector matures over time, FortisBC believes that incentives will no longer be necessary. Although the incentive program is expected to expire in 2017, utility customers and British Columbians will continue to benefit as the adoption of natural gas vehicles increases.

Eligible applicants for this program are commercial, return-to-base fleet operators of:

• heavy-duty trucking  (highway transport tractors)
• buses (transit, school)
• vocational vehicles (refuse trucks,  delivery vehicles)
• marine vessels (ferries)

FortisBC is intending to begin accepting applications in early June. All applications will be evaluated in a competitive process measured against defined program criteria. This process and the incentive awards will be reviewed by a third party fairness advisor. It is expected that program demand will exceed available funding. Successful applicants will be announced publicly with disclosure of project details and amount of funding awarded. Full program details and updates are available at fortisbc.com/ngt

In addition to its pipeline system, FortisBC has an LNG facility in Delta and another near Ladysmith, making the company well positioned to support natural gas as a transportation fuel for the B.C. market.

FortisBC is a regulated utility focused on providing safe and reliable energy, including natural gas, electricity, propane and thermal energy solutions. FortisBC employs more than 2,300 British Columbians and serves approximately 1.1 million customers in more than 135 B.C. communities. FortisBC is indirectly wholly owned by Fortis Inc., the largest investor-owned distribution utility in Canada. FortisBC owns and operates four regulated hydroelectric generating plants, approximately 7,000 kilometres of transmission and distribution power lines and approximately 47,000 kilometres of natural gas transmission and distribution pipelines. FortisBC Inc., FortisBC Energy Inc., FortisBC Energy (Vancouver Island) Inc., and FortisBC Energy (Whistler) Inc. do business as FortisBC. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com or www.sedar.com.

MEDIA BACKGROUNDER - FortisBC and Natural gas for transportation

B.C.'s transportation industry is responsible for about 36 per cent of provincial greenhouse gas emissions.

FortisBC natural gas vehicle projects

• Waste Management has converted 20 new waste hauler trucks in the Lower Mainland to CNG.
• Vedder Transport has added 50 heavy-duty LNG trucks to its fleet.
• Kelowna School District has converted 13 new school busses to CNG
• BFI, through its contract with the City of Surrey, will convert 52 new waste haulers to CNG.

In 2011, FortisBC received regulatory approval to provide temporary refuelling services to Vedder Transport through an LNG fuelling station. This interim station will stay in service until the permanent facility is completed later in 2012. It will be Western Canada's first large-scale liquefied natural gas fuel station, helping reduce B.C.'s greenhouse gases by over 3,500 tonnes a year.  Vedder Transport is able to safely and economically refuel their new fleet of 50 LNG-powered trucks on their own premises.

Environmental benefits
Converting fleets and vehicles to natural gas not only helps the province meet its greenhouse gas reduction goals but also helps improve air quality in the communities in which they serve.

• Natural gas burns cleaner than gasoline or diesel, which can result in less pollution and greenhouse gases.
• Carbon dioxide (CO₂) emissions, the principal greenhouse gas that contributes to global warming, are reduced by 20 to 30 per cent
• Natural gas vehicles emit virtually no particulate matter, the harmful microscopic component of air pollution that penetrates deeply into the lungs.
• Businesses converting their fleet to natural gas will help meet the province's requirements for greenhouse gas reductions under the B.C. Greenhouse Gas Reduction Targets Act.
• Natural gas for transportation also helps achieve B.C.'s energy objectives defined under the Clean Energy Act.

Other benefits

• More stable fuel costs: historically, natural gas commodity prices have been shown to be more stable, compared to the fluctuation of prices for diesel and gasoline. Natural gas fuel costs have historically been 25 to 40 per cent less than diesel.
• Fewer emissions: natural gas is a cleaner burning, lower carbon fuel than diesel or gasoline.
• Quieter: operators of natural gas waste hauler trucks report they are quieter than comparable diesel trucks.

FortisBC light-duty incentive program
Although FortisBC's focus remains on heavy-duty natural gas return-to-base fleets to help establish the required re-fuelling infrastructure, it is continuing an incentive program for customers purchasing a new factory built CNG light-duty vehicle or converting an existing light-duty vehicle to CNG.

FortisBC is offering incentives for light-duty vehicles such as:

• passenger cars (e.g. Honda Civic GX),
• pickup trucks (e.g. Ford F150),
• cargo vans and minivans (e.g. Chevrolet Express Van), and
• forklifts.

FortisBC has been an active member of the Canadian Natural Gas Vehicle Alliance and the Canadian Gas Association, helping to promote natural gas as a transportation fuel in Canada.

 

Media contact:
Joyce Wagenaar
Director, Communications
FortisBC
Phone: [phone]
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